Leaflet Delivery Response Rate

[businessquest]

Hello - my new found addiction UKBF =)

I'll try not to write an essay as I normally find myself doing... =)

My business is about to embark on leaflet distribution. 10,000 for the first campaign by a distribution company I have affiliated with for a while.

I offer web design services, but am promoting a 'package' service.

I want to test the waters so will be distributing 2,000 leaflets myself (with a little help of course) in a well-off residential area.

I'm going to test the water with residential homes myself first, and then do the first campaign (using a company) in residential homes first. After that I will analise the response rate and then for the next campaign distribute them to businesses and see how that goes.

As I design the marketing materials myself I save money there. I've been working on the material for a while so I've got the incentive etc all there - seems like a good piece. I also get quality printing done at a very reduced rate. Quality is really important in everything I do so even for the test run I'd had them printed on A6 400GSM card and gathered positive feedback on the impact of marketing material.

Okay so, that's my plan - the 2,000 test run I will do myself costs me no more than £55 out of my pocket (discount printing). I will just be using my time to distribute the leaflets. From that I will only need ONE response/sale to make my money back with approx. 7 times profit.

If the response rate is 0.1% that means I could get TWO sales. Does this response rate sound reasonable?

Does this sound like a good plan before hiring a company?

Once I use the distribution company for the 10,000 campaign (solus residential) it'll cost me approx. £550 in total including my discounted printing costs.

With this I would again only need 2 sales to break even (with some extra change) so it is not a major risk. With the 0.1% response rate I could get 10 sales - even better.

I'm quite confident in this but would like your opinions:

- Is the response rate realistic? Are you in the same field and have done such with a similar response rate?

- Any thoughts in general would be good from both leaflet distributors and web design companies whom have done the same type of campaign.

Thank you!

 

[Kernowman]

A 0.1% response rate is to say the least, not impressive.

I can't decipher either why you believe that residential addresses are gong to best your best Marketing strategy for locating your prime prospects, given that a fairly predictable percentage are not even going to own a computer and a percentage of a small percentage will actually want a website building. You may be lucky in hitting the "off duty" business people at their homes.

 

[businessquest]

I meant a 0.1% rate being realistic..

I mean, a 10% response rate would be great but obviously that's not realistic.

So I'm saying, if I get a 0.1% rate as a minimum and still make a profit from that, then clearly a higher response rate would make me more.

I'm using this a test as I won't be risking much. I also did think whether homes were a good idea but at the end of the day people who own businesses still come home, so it'll be there for them to see.

I'll be distributing to businesses at a later date as it'll obviously be more expensive.

 

[akirk]

there is a logic in your calculations... if you can make a profit on a 0.1% response, then clearly higher will be helpful...

the only point at which you might have made a mistake is if the response is sufficiently high that you can not scale to accept the business...

Alasdair

 

[businessquest]

@akirk Thanks for your response

As many would say, too much business would be a good problem to have but yes, I've thought about that previously and would be able scale accordingly to cope with it if it does get sufficiently high.

 

[Kernowman]

I meant a 0.1% rate being realistic..

I mean, a 10% response rate would be great but obviously that's not realistic.

So I'm saying, if I get a 0.1% rate as a minimum and still make a profit from that, then clearly a higher response rate would make me more.

I'm using this a test as I won't be risking much. I also did think whether homes were a good idea but at the end of the day people who own businesses still come home, so it'll be there for them to see.

I'll be distributing to businesses at a later date as it'll obviously be more expensive.

I would like to know though the logic behind targeting residential addresses by almost a "carpet bombing" method in the hope of hitting some rare hidden targets . You do as you see fit of course and good luck to you if/when you succeed, but in terms of efficiency and payback values for the time and effort you have expended to get you there, when I believe there are more efficient and targeted methods of achieving better results. It is on that basis that I remarked on the 0.1% hit rate.

 

[businessquest]

Well the logic is, firstly to test the waters - to see what the actual response rate will be like in a well-off residential area and if it can still benefit me. Even with a 0.1% RR, profit is still profit and I'd be only spending pocket change.

Secondly, it depends on the area - as I said previously, people who work or own a business still come back to their residence at the end of the day.

Thirdly, I'll be doing the drop myself/with help - so residential is easier and quicker.

Fourth, when using the distribution company - residential is cheaper. With a low RR at 0.1% and still making a profit, that'll be fine to me even if it is NOT YET targeted at business premises. Again, I'm not really losing much and its merely a test.

Fifth - businesses need capital. Before I spend double the amount on B2B distribution, using residential to gain some profit (even if less than B2B) can help be put towards when I embark on distributing to targeted businesses in my targeted locations.

If it's possible to make profits whilst spending less then clearly I'm going to use that option first to make more money in which I can later use for my B2B targeted marketing.

B2B targeted distribution was my original plan - it'll be more successful but at the end of the day it's more money, and you need money to make money.

Think of it as new freelancers - doing client work to build their portfolio and earn a healthy capital (even if they know they can earn more from larger companies) so they can then use the money and portfolio work to start up their own design firm and pick and choose which corporate clients they work with.

I spend less, with the opportunity of making lots. If the response is more than 0.1% I can continue spending barely nothing and making profits AND do B2B. If it only gives me around a 0.1% RR I can save and use the profit I make towards larger scaled business targeted distribution and it'll still be a healthy profit for me.

I hope that's made things a bit more clear.

 

[Kernowman]

A plan, is a plan, is a plan, as they say

The one thing in your plan's favour is that there isn't a massive outlay at risk, so from that point of view it does make sense.

I would imagine too that there are a good number of sole traders and "back bedroom industries" without websites that you might also manage to locate.

I personally would do a 50/50 split between residential and commercial and see what falls out the other end at that level of investment.